HOUSTON – A Magnolia, Texas, businessman and a Chicago man have been sentenced for conspiring to commit wire fraud, United States Attorney Kenneth Magidson announced today. Evan “Nick” Jarvis, 39, of Magnolia, Texas, and Alex Ellerman, 36, of Chicago, pleaded guilty to the offense on March 4, 2011, and March 8, 2011, respectively.

At their plea hearings, Jarvis and Ellerman admitted they conspired with James Roland Dial, 56, of Houston, to enrich themselves between 2004 and 2007 by artificially inflating the stock price of a publicly-traded company called Grifco International Inc. Grifco manufactured oil field drilling equipment and Dial was Grifco’s CEO. Jarvis and Ellerman admitted knowing that Grifco issued a press release to the public on March 3, 2005, containing false information about Grifco’s revenue and net income and that he willfully and knowingly profited from the false press release by selling Grifco stock to the public at an inflated price. The stock ultimately became worthless.

Approximately 300 investors who had purchased Grifco stock submitted impact statements to the court for consideration at today’s sentencing, several of whom noted they had lost their life savings because of the fraud. Senior U.S. District Judge David Hittner, who accepted the guilty pleas in the case and presided over the hearing today, handed Jarvis a five-year prison sentence to be followed by three years of supervised release. In light of his cooperation in the case, Ellerman received a reduced sentence of 40 months. Dial was sentenced last month to five years in prison.

Judge Hittner also ordered Jarvis and Ellerman to pay restitution to their victims. A hearing to determine the amount of such restitution will be held no later than Aug. 2, 2012. Jarvis, who admitted obtaining at least $2 million from the conspiracy, has agreed to sell real property located at 28322 Meadow Falls, Magnolia, Texas, currently valued at $1.8 million and also to sell certain luxury vehicles including a Chevrolet Corvette and a Porsche automobile and to apply the proceeds against his restitution obligation.

Jarvis had been permitted to remain on bond pending his sentencing hearing, but was taken into custody on May 3, 2012, for violating conditions of his bond where he will now remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future. Ellerman has been in custody since April 20, 2010, when he was arrested at George Bush Intercontinental Airport upon returning to the United States after a lengthy stay in Panama.

The two-year investigation leading to the charges was conducted by the FBI with the assistance of the Harris County District Attorney’s Office. The U.S. Securities & Exchange Commission has conducted a parallel investigation. Assistant U.S. Attorney John R. Lewis is prosecuting the case.